TRUMP’S POLICIES ARE KILLING GROWTH 3/3

While inflationary risks are still present, the U.S. bond market is increasingly benefiting from the heightened risk of an economic slowdown. We believe a more rapid downward impact on long-term rates will materialize in response to economic data showing a clear weakening of consumption and investment. Since the peak of concern around the presidential inauguration, ten-year U.S. Treasury yields have fallen from 4.8% to 4.10%. We have a favorable outlook for USD bonds in the medium term, as this trend is likely to continue before the Fed reacts.